HOUSE BILL No. 4813

 

June 6, 2013, Introduced by Reps. Rutledge and Rogers and referred to the Committee on Education.

 

     A bill to amend 1976 PA 451, entitled

 

"The revised school code,"

 

by amending section 12 (MCL 380.12) and by adding section 12a.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 12. (1) A school district shall lose its organization if

 

there and shall be declared dissolved if any of the following

 

conditions are met:

 

     (a) There are not enough persons residing in the school

 

district and qualified under the law to hold district all of the

 

offices of the school district or who will accept the offices of

 

the school district. Under either condition,

 

     (b) The superintendent of public instruction and state

 

treasurer jointly determine that both of the following apply:

 

     (i) The school district was required to submit a deficit

 


elimination plan under the state school aid act of 1979 and the

 

school district either failed to submit a plan or lacks the

 

capability to both implement a deficit elimination plan and meet

 

the school district's obligations to provide public educational

 

services to pupils and other residents of the school district in a

 

manner that complies with this act, the state school aid act of

 

1979, and rules promulgated by the department.

 

     (ii) The school district is not financially viable and is

 

unable to educate pupils in grades K-12 residing in the school

 

district by operating schools for a full school year and providing

 

the required number of instructional hours under this act and the

 

state school aid act of 1979.

 

     (2) If 1 or more of the conditions under subsection (1) are

 

met for a school district, the intermediate school board of the

 

intermediate school district to which the school district is

 

constituent, or the superintendent of public instruction if that

 

intermediate school board requests the superintendent of public

 

instruction to act in its place, shall declare the school district

 

dissolved and immediately shall attach order attachment of the

 

territory of the school district, in whole or in part, to 1 or more

 

other organized school districts. and In attaching the territory of

 

the dissolved school district to other school districts, the

 

intermediate school board or the state superintendent should take

 

into account the number of pupils who are transferred into each of

 

those other school districts relative to the number of pupils

 

already enrolled in the other school district and the numbers of

 

pupils who qualify for free and reduced price lunch among the other

 


school districts. Within 21 days after a school district is

 

declared dissolved, the dissolved school district shall account to

 

the intermediate school district for all records, funds, and

 

property of the school district and shall make an equitable

 

distribution of the money, property, and other material belonging

 

to the district among the districts to which the territory is

 

attached.records, funds, and property consistent with the ordered

 

attachment to each receiving school district.

 

     (2) The property of the disorganized district is subject to

 

all increases in the constitutional limitation on taxes which have

 

been voted by the school electors of the district to which it is

 

attached. The disorganized district shall receive a credit in the

 

amount of a levy remaining to be paid on an outstanding debt in the

 

disorganized district, which shall be paid until debt is retired.

 

The disorganized district shall pay an amount equal to the amount

 

levied for debt retirement by the district to which it is attached

 

not to exceed 5 mills on the state equalized valuation in the

 

disorganized district. All other taxes levied for the purposes of

 

the combined school district, including taxes for the retirement of

 

bonded indebtedness, shall be spread over the entire area of the

 

combined district.

 

     (3) A disorganized district having a bonded indebtedness shall

 

be attached in whole to another school district by the intermediate

 

school board. The identity of the district is not lost because of

 

the attachment, and its territory remains as separate assessing

 

unit for the purpose of the bonded indebtedness until the

 

indebtedness is retired or refunded. The board of the district to

 


which the disorganized district is attached shall constitute the

 

board of trustees for the disorganized district having the bonded

 

indebtedness. Its officers shall be the officers for the

 

disorganized district. The board of the district to which the

 

disorganized district is attached shall certify the levy of taxes

 

for bonded indebtedness in the name of the disorganized district,

 

shall not commingle the debt retirement funds of the disorganized

 

district with those of the district to which it is attached, and

 

shall do all things relative to the bonded indebtedness required by

 

law and by the terms under which the issuance and sale of the bonds

 

were originally authorized. All other taxes levied for the purposes

 

of the combined school district, including taxes levied for the

 

retirement of bonded indebtedness, shall be spread over the entire

 

area of the combined school district.

 

     (3) If a dissolved school district has outstanding debt, the

 

dissolved school district shall retain a limited separate identity

 

and the territory of the dissolved school district shall continue

 

as a separate taxing unit for the limited purpose of the debt until

 

the debt is retired or refunded. The board and other officers of

 

the school district to which the largest share of the state

 

equalized value of the dissolved school district is attached shall

 

perform the functions and satisfy the responsibilities of the board

 

and other officers of the dissolved school district relating to the

 

debt, including, but not limited to, all of the following:

 

     (a) Certifying and levying taxes for satisfaction of the debt

 

in the name of the dissolved school district.

 

     (b) Holding debt retirement funds of the dissolved school

 


district separately from the funds of the receiving school

 

district.

 

     (c) Doing all other things relative to the outstanding debt of

 

the dissolved school district required by law and by the terms of

 

the debt, including, but not limited to, levying or renewing a

 

school operating tax under section 1211. The question of renewal of

 

a school operating tax pledged to the repayment of debt of the

 

dissolved school district shall be submitted only to school

 

electors residing within the geographic area of the dissolved

 

school district and does not require approval by electors of a

 

receiving school district not residing within the geographic area

 

of the dissolved school district.

 

     (4) Upon the attachment of a disorganized dissolved school

 

district to another school district, the intermediate school board

 

shall audit the assets and liabilities of the disorganized

 

dissolved school district. If a considerable discrepancy is found,

 

the intermediate school board shall order the receiving dissolved

 

school district to pay the discrepancy. The disorganized After

 

first satisfying debt obligations, the dissolved school district

 

shall repay that amount from moneys money available to the

 

dissolved school district including voted millage within a time to

 

be determined by the intermediate school board.

 

     (5) If a tax is authorized within a receiving school district

 

at an amount greater than the amount authorized within the

 

dissolved school district at the time of the dissolution, the tax

 

may not be levied within the geographic area of the dissolved

 

school district until approved by the school electors residing

 


within the geographic area of the dissolved school district or by

 

all school electors within the receiving school district, including

 

any expanded geographic area of the receiving school district

 

resulting from attachment under this section.

 

     (6) If a dissolved school district was authorized to levy a

 

sinking fund tax under section 1212 at the time of dissolution, the

 

identity of the dissolving school district as a legal entity shall

 

not be lost and its territory shall remain as a taxing unit for the

 

limited purpose of levying a sinking fund tax under section 1212

 

until the authorization to levy a sinking fund tax within the

 

dissolved school district expires. For purposes of this subsection,

 

the board and other officers of the receiving school district that

 

received the largest share of the state equalized valuation of the

 

dissolved school district shall perform the functions and

 

responsibilities of the board and other officers of the dissolved

 

school district relating to levying the sinking fund tax and shall

 

distribute the proceeds of the levy to each receiving school

 

district that operates a school building previously operated by the

 

dissolved school district. The proceeds of a sinking fund tax levy

 

under this subsection may be used only within the geographic area

 

of the dissolved school district for purposes authorized under

 

section 1212. A receiving school district may not renew or

 

authorize a new sinking fund tax levy only within the geographic

 

area of the dissolved school district.

 

     (7) It is the intent of the legislature to amend the state

 

school aid act of 1979 to ensure that it is consistent with this

 

subsection. In determining the foundation allowance for a receiving

 


school district under section 20 of the state school aid act of

 

1979, MCL 388.1620, the local school operating revenue of that

 

receiving school district shall not include revenue generated

 

within a dissolved school district by a school operating tax levied

 

under section 1211 on behalf of the dissolved school district for

 

the purpose of satisfying outstanding debt of the dissolved school

 

district under subsection (3). For the 4 state fiscal years

 

immediately after the dissolution of a school district, a receiving

 

school district may elect to receive either of the following

 

foundation allowances under the state school aid act of 1979 for

 

each pupil who was enrolled in the dissolved school district

 

immediately before the dissolution who is subsequently enrolled in

 

and counted in membership in the receiving school district:

 

     (a) A foundation allowance equal to 1.1 times the foundation

 

allowance of the receiving school district.

 

     (b) A foundation allowance equal to 1.1 times the foundation

 

allowance of the dissolved school district if the dissolved school

 

district had not been dissolved under this section and had

 

continued to educate its pupils directly on its own.

 

     (8) Except as otherwise provided in this subsection, an

 

individual who was employed by a dissolved school district

 

immediately before the dissolution who remains employed by a

 

receiving school district is entitled to all the rights and

 

benefits to which the person would otherwise be entitled had the

 

person been employed by the receiving school district during the

 

time he or she was employed by the dissolved school district,

 

including, but not limited to, any rights under 1937 (Ex Sess) PA

 


4, MCL 38.71 to 38.191. An employment agreement in effect at the

 

time of the dissolution of a school district under this section

 

with the dissolving school district and each receiving school

 

district shall remain in full force and effect for the duration of

 

the agreement for employees covered by the agreement, until a

 

successor agreement with the receiving school district is

 

effective.

 

     (9) The department shall not include the test scores of pupils

 

from the dissolved school district for determining adequate yearly

 

progress status or for "top-to-bottom" rankings of the receiving

 

school districts for the first 3 school years after dissolution.

 

     (10) The pupils formerly enrolled in the dissolved school

 

district have all the legal and constitutional rights and

 

privileges of the other pupils enrolled in the receiving school

 

districts.

 

     (11) For a period of 2 years following dissolution, all new

 

employees hired by a receiving school district, except for

 

administrators, shall be hired from among those who were first

 

interviewed and employed by the dissolved school district within

 

the last year before the dissolution.

 

     (12) As used in this section:

 

     (a) "Debt" means that term as defined in section 103 of the

 

revised municipal finance act, 2001 PA 34, MCL 141.2103.

 

     (b) "Receiving school district" means a school district to

 

which all or part of the territory of a dissolved school district

 

is attached under this section.

 

     Sec. 12a. (1) As permitted under federal law, if a school

 


district is dissolved under section 12 or if the functions and

 

responsibilities of a school district for operating a public school

 

are transferred to another public entity, including, but not

 

limited to, a transfer to another public entity under section

 

1280c, the superintendent of public instruction shall grant each

 

receiving school district or other public entity assuming the

 

functions and responsibilities for the public school an allocation

 

of grants under 20 USC 6333, 6334, 6335, and 6337 and of other

 

federal funds that would otherwise be made available for grants to

 

or federal funding for the public school or make other adjustments

 

in the allocation of federal funds to implement the dissolution of

 

the school district or other transfer of functions and

 

responsibilities.

 

     (2) As used in this section, "receiving school district" means

 

that term as defined in section 12.